Sam episode a lesson for Indian startups
Experts say promoters of startups should keep management control with them
image for illustrative purpose
The lesson for Indian startup ecosystem is ‘don’t give up control’. If you are a founder, then keep the control with you, so that the board can’t take harsh action - V Balakrishnan, chairman, Exfinity Ventures & former CFO of Infosys, tells Bizz Buzz
Divergent Corporate Practice
- Indian boards far less independent than the US boards
- ChatGPT creater OpenAI sacked its CEO
- The episode shows dicey nature of organisation structuring in startups
Bengaluru: Sam Altman’s ouster as the Chief Executive Officer (CEO) by the OpenAI’s board is likely to make Indian startup founders cautious about divesting stake in the future. Experts are of the opinion that the likelihood of firing the CEO in any Indian startup is remote by the board given the cultural differences in boards of India and the US.
“India may not see such kind of instances like the US. In India, the board usually provides a long rope to senior management except in case of fraudulent activities. Indian boards are very cautious and they normally take hard decisions. But the lesson for Indian startup ecosystem is ‘don’t give up control’. If you are a founder, then keep the control with you, so that the board can’t take harsh action,” V Balakrishnan, Chairman, Exfinity Ventures & former CFO of Infosys told Bizz Buzz. He also said that the boards in the US are very effective as compared to India because of their independence and faster decision-making.
“US boards are very different. In India, most companies put only known people on the board, which is not the case in the US. In the OpenAI’s case, large investor like Microsoft didn’t have a say. It showed the independence of the board,” Balakrishnan added.
On Saturday, OpenAI, the company that created ChatGPT, had sacked Altman, saying it no longer had confidence in his ability to lead the Microsoft-backed AI firm.
The board in a statement had said it was “grateful for Sam’s many contributions to the founding and growth of OpenAI. At the same time, we believe new leadership is necessary as we move forward.”
Subsequently, there were a flurry of activities by big investor groups like Microsoft to reappoint Altman as CEO again. However, defying all such calls, OpenAI hired former Twitch chief Emmett Shear as the next CEO.
